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When a Production Quota Is Used to Remedy the Tragedy

Question 31

Multiple Choice

When a production quota is used to remedy the tragedy of the commons,then


A) the quota is set so that use of the resource is where marginal private benefit equals marginal private cost.
B) the quota is set so that use of the resource is where marginal private benefit equals marginal social benefit.
C) the market equilibrium, but not the efficient outcome, is achieved.
D) users of the resource have an incentive to cheat on the quota.
E) previous users of the resource are given the incentive to avoid use of the resource.

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